The Himachal Pradesh High Court addressed the issue of multiple proceedings by different GST authorities concerning the same subject matter after a Show Cause Notice was issued. The case involved M/s Vardhman Ispat Udhyog, which received several communications from various CGST authorities about alleged fake Input Tax Credit (ITC) transactions from June 2024 to February 2025. The petitioner had already responded to these notices, assuming the matter was being handled by one authority.
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On March 11, 2025, the Deputy Commissioner of CGST Division Dharamshala issued a Show Cause Notice on the same allegations, prompting the petitioner to challenge the parallel proceedings in court. The petitioner argued that such actions by different GST authorities were unlawful once a Show Cause Notice had been initiated by one competent authority.
The High Court referred to the Supreme Court's decision in M/s Armour Security (India) Ltd., emphasizing that proceedings officially start with a Show Cause Notice and that Section 6(2)(b) of the CGST Act prohibits parallel adjudicatory proceedings on the same issue. The Court ruled that only the authority issuing the Show Cause Notice should adjudicate the matter, while other authorities should cease separate proceedings and forward their records to the issuing authority.
The Court directed the petitioner to respond to the Show Cause Notice and instructed the adjudicating authority to resolve the matter according to law. It also emphasized compliance with Supreme Court guidelines to prevent duplicate proceedings, ensuring the petitioner is informed and has the opportunity to respond effectively.
Order Date - 06 July 2026
Parties: M/s Vardhman Ispat Udhyog Vs Adjudicating Authority-cum-Deputy Commissioner, CGST Division Dharamshala & Ors.
Facts -
- M/s Vardhman Ispat Udhyog received multiple communications from different CGST authorities between June 2024 and February 2025 regarding alleged fake Input Tax Credit (ITC) transactions, despite the issue relating to the same subject matter.
- The petitioner responded to the notices and communications by furnishing the required information, believing that the matter was already under examination by one authority.
- Subsequently, the Deputy Commissioner, CGST Division Dharamshala, issued a Show Cause Notice dated 11.03.2025 concerning the same allegations.
- Challenging the multiple proceedings, the petitioner approached the High Court, contending that parallel actions by different GST authorities on the same subject were contrary to law.
Issue -
- Whether multiple GST authorities can continue parallel proceedings on the same subject matter after a Show Cause Notice has already been issued by one competent authority.
Order -
- The High Court relied on the Supreme Court's decision in M/s Armour Security (India) Ltd., which clarified that "proceedings" formally commence with the issuance of a Show Cause Notice and that Section 6(2)(b) of the CGST Act prohibits parallel adjudicatory proceedings on the same subject matter.
- The Court observed that although different authorities may conduct preliminary inquiries or investigations, once a Show Cause Notice is issued, the authority issuing that notice gets precedence to adjudicate the matter. Other authorities must refrain from continuing separate proceedings on the same issue.
- It directed that all authorities dealing with the same subject matter should forward their investigation records and relevant material to the authority that issued the Show Cause Notice, while also informing the petitioner so that an effective opportunity to respond is preserved.
- Disposing of the writ petition, the Court instructed the petitioner to file a reply to the Show Cause Notice dated 11.03.2025. It further directed the adjudicating authority to decide the matter in accordance with law, while ensuring that all other authorities strictly follow the Supreme Court's guidelines to avoid duplication of proceedings.
